Posted on: 27th Dec, 2010 05:59 pm
going through a refinance and signed paperwork to lock in my refi at 3.75% for a 15 year loan the day before thanksgiving. signed good faith estimate and acknowledgement as well as an intention to lock in my rate. didn't find out until last week that my loan officer was delayed in getting my paperwork to underwriting and it got kicked back because he didn't lock in my rate yet. rate must be locked in before it goes to underwriting with this company. loan office admits that he made the mistake. didn't lock in my rate at all and now the rates are much higher at above 4%. says that there's nothing he can do about it except watch rates like a hawk and wait to see if they go back down to that level again.
talked to loan officer's boss about it because this loan officer knew he made a mistake but didn't inform me because he was hoping that rates would go back down and he could correct the situation for me. boss tells me that he can offer me 2 options - #1 offer is to lock in at the prevailing rate. #2 offer is for me to buy down loan to the original lock in rate. either option is going to be more expensive for me. either they want me to pay $2,000 plus more in upfront fees to buy down the loan, or pay more than $7,000 more in interest across the 15 year life of the loan.
i feel like i am getting the short end of the stick. didn't gfe's become binding in 2010? do i have any legal recourse at all? loan officer's boss has escalated the situation to his boss (the east coast vp) who came back to say that there's nothing they can do except give me a loan for the prevailing rate. we didn't make any mistakes here, the loan officer made the mistake. i feel like we are being asked to pay for his mistake and the company is not owning up to it. as a business owner myself, i understand that mistakes sometimes happen. people are only human but sometimes, a business sustains a loss to make up for a mistake.
i want the mortage broker company to pay down points so that i can get the rate that i should have locked in if the loan officer had done everything that he was supposed to do. do i have any legal standing at all?
any help would be appreciated.
thanks,
teresa
talked to loan officer's boss about it because this loan officer knew he made a mistake but didn't inform me because he was hoping that rates would go back down and he could correct the situation for me. boss tells me that he can offer me 2 options - #1 offer is to lock in at the prevailing rate. #2 offer is for me to buy down loan to the original lock in rate. either option is going to be more expensive for me. either they want me to pay $2,000 plus more in upfront fees to buy down the loan, or pay more than $7,000 more in interest across the 15 year life of the loan.
i feel like i am getting the short end of the stick. didn't gfe's become binding in 2010? do i have any legal recourse at all? loan officer's boss has escalated the situation to his boss (the east coast vp) who came back to say that there's nothing they can do except give me a loan for the prevailing rate. we didn't make any mistakes here, the loan officer made the mistake. i feel like we are being asked to pay for his mistake and the company is not owning up to it. as a business owner myself, i understand that mistakes sometimes happen. people are only human but sometimes, a business sustains a loss to make up for a mistake.
i want the mortage broker company to pay down points so that i can get the rate that i should have locked in if the loan officer had done everything that he was supposed to do. do i have any legal standing at all?
any help would be appreciated.
thanks,
teresa
Hi chesteresa!
Welcome to forums!
You can contact an attorney and check out if you can sue your loan officer. But as the loan officer's boss said, there is hardly anything that you can do. In my opinion, if you want to get this loan, it will be better if you could pay points and buy down your mortgage rate. If it is possible for you, you should pay $2000 in upfront fees and buy down the loan. You can negotiate with the loan officer in order to check if the mortgage company can pay down the points for you.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
You can contact an attorney and check out if you can sue your loan officer. But as the loan officer's boss said, there is hardly anything that you can do. In my opinion, if you want to get this loan, it will be better if you could pay points and buy down your mortgage rate. If it is possible for you, you should pay $2000 in upfront fees and buy down the loan. You can negotiate with the loan officer in order to check if the mortgage company can pay down the points for you.
Feel free to ask if you've further queries.
Sussane
The loan officer erred, not the company. So, naturally, the company will not grant you what you desire, and that's mainly because in dealing with secondary markets, they'd end up with a loan that isn't saleable.
Now, lenders do grant subsidies to their loan officers at times, allowing them to cover their mistakes such as happened here. Whether such a subsidy is available from this company isn't known, of course, and their willingness to do so is another thing we don't know. The loan officer dug his own grave, and the company isn't required to back him up, particularly since it will cost the company money to allow the lower rate.
I don't know what an attorney can do for you in terms of suing; I think that's a waste of time, money and energy. Will rates drop again? Probably not, it appears. I suppose that your worst case scenario might be the only scenario that works and that is to pay the upfront costs...but I would definitely ask the loan officer if he can obtain a subsidy that will lower your out-of-pocket expense. The guy doesn't want to make no money on this deal, but he may have to settle for less than he was counting on to begin with.
Now, lenders do grant subsidies to their loan officers at times, allowing them to cover their mistakes such as happened here. Whether such a subsidy is available from this company isn't known, of course, and their willingness to do so is another thing we don't know. The loan officer dug his own grave, and the company isn't required to back him up, particularly since it will cost the company money to allow the lower rate.
I don't know what an attorney can do for you in terms of suing; I think that's a waste of time, money and energy. Will rates drop again? Probably not, it appears. I suppose that your worst case scenario might be the only scenario that works and that is to pay the upfront costs...but I would definitely ask the loan officer if he can obtain a subsidy that will lower your out-of-pocket expense. The guy doesn't want to make no money on this deal, but he may have to settle for less than he was counting on to begin with.
Thanks for your answers.
George, you said that the loan officer erred, not the company. I don't quite understand. Doesn't the loan officer work for the company or are you saying that they are independent of the company? Seems to me that the company should still be held responsible for their loan officer's mistakes. Loan officers are conducting business in the name of the company are they not?
I've never heard of the subsidy before, so I'll have to check into it. Thanks for the info.
I just can't believe that because of someone else's error, my best solution is that I should pay thousands of more dollar to get the rate I originally should have gotten had someone not made a mistake. It seems very unfair and I'm quite disappointed that I have no other viable options available to me.
The good faith estimate became binding in 2010 because there were too many incidences of mortgage companies pulling the old bait and switch tactic. Many companies were giving people low rates, but when it came time to settle, they would say that the low rate was not available and you would have to pay more, or risk not getting the house you wanted. I feel like I'm in the same situation.
If I don't have any legal standing, is there any place where I can lodge an official complaint? BBB? HUD? Is there a specific organization within the mortgage industry or mortgage license or broker industry where I can file a grievance?
Thanks,
Teresa
George, you said that the loan officer erred, not the company. I don't quite understand. Doesn't the loan officer work for the company or are you saying that they are independent of the company? Seems to me that the company should still be held responsible for their loan officer's mistakes. Loan officers are conducting business in the name of the company are they not?
I've never heard of the subsidy before, so I'll have to check into it. Thanks for the info.
I just can't believe that because of someone else's error, my best solution is that I should pay thousands of more dollar to get the rate I originally should have gotten had someone not made a mistake. It seems very unfair and I'm quite disappointed that I have no other viable options available to me.
The good faith estimate became binding in 2010 because there were too many incidences of mortgage companies pulling the old bait and switch tactic. Many companies were giving people low rates, but when it came time to settle, they would say that the low rate was not available and you would have to pay more, or risk not getting the house you wanted. I feel like I'm in the same situation.
If I don't have any legal standing, is there any place where I can lodge an official complaint? BBB? HUD? Is there a specific organization within the mortgage industry or mortgage license or broker industry where I can file a grievance?
Thanks,
Teresa
Rates as of today are at 4.3% according to Bloomberg. He or she can lock in the rate unless the bank or lender you are going to doesn't go down that low. It depends if you are using a mortgage broker or retail shop (ie: bank on your local town etc). IF you are using a broker it may cost them to actually give you that rate now. Usually the game is played if they want to make more of a commission, regardless of what the rate maybe. Mortgage brokers are notorious for not locking in or saying that because they can rate hike you. IT's a game often played in the mortgage field. If you have to call the attorney general or banking department of your state. After all you signed a paper work, I have over 10 years in the mortgage business and it's people like that who have given good brokers a bad name. Pay it forward.